Haneef, who was detained after being wrongly accused of having links to the failed Glasgow bombing attempt in 2007, yesterday struck a deal with the government for receiving 'substantial' compensation over the bungled case after two days of negotiation.
His lawyer Rod Hodgson today said that the Australian government had also agreed to issue a public apology reaffirming the doctor's innocence, a report in the ABC said.
"I'm not sure precisely when it's going to be publicised but you can expect that there will be a public apology to Haneef reaffirming his innocence," he said.
"The Commonwealth has recognised that through this process and that's an absolutely tremendous outcome for Haneef to have," he said.He said the financial settlement was "substantial" and Haneef was "delighted" with the deal.
In return, Haneef has dropped a civil claim against the government and defamation action against the former immigration minister Kevin Andrews, who had revoked the doctor's visa after he got bail.
"The resolution of this matter will lead to the cessation of all legal proceedings against the Commonwealth and Andrews," he said.
The amount of the financial compensation agreed upon has been kept under wraps, and the government said the terms of the settlement could not be revealed because of a confidentiality agreement.
According to lawyer Peter Russo, who has been representing Haneef since he was held in detention, his client's reputation was not tarnished forever.
"I would hope not. I would hope that the average Australian would see that he was an innocent man and allow him to get on with his life now," he said.He said Haneef was a quiet man who has handled the episode and its aftermath with courage.
"His demeanor really has not changed throughout his ordeal," Russo said.
"In my view, I think he handled it with a great deal of courage and it's a credit to himself that he handled it the way he did," he said.The former immigration minister Andrews, however, is still unmoved.
He said the claim for defamation against him was always "adventurous" and he has made no apology and paid no compensation to Haneef
"I have been advised that Haneef has withdrawn his action for defamation against me," Andrews said in a statement.
"I have made no apology. Nor has any compensation been paid in relation to the defamation action. In other words, the claim against me was not pursued and has been withdrawn," he said.
Andrews said based on the legal advice he received, he was always confident that the claim for defamation was "adventurous" and would not have succeeded.
The Greens said they are not convinced the Federal Government has put enough safeguards in place to prevent a repeat of the Haneef affair.
But Attorney-General Robert McClelland insisted the government has put extra safeguards in national security legislation to avoid a similar situation occurring again.
Greens Senator Sarah Hanson-Young said she does not believe there are sufficient checks in place.
"There were commitments to review various parts of the anti-terror legislation and the limits on being held without charge," she said.
"My understanding is that we haven't seen a resolution yet to the review of those anti-terror legislation laws. So until we do, I'm not sure it's fixed," she said.
Haneef is a cousin of Sabeel Ahmed -- the main accused in the failed attack on the Glasgow International Airport in the UK in 2007.
He was taken into custody and charged with recklessly giving support to a terrorist organisation when his mobile phone SIM card, which he had left with his cousin before coming to Australia from the UK, was linked to the attack.
His detention was the longest without charge in recent Australian history, and his case caused a lot of outrage in India as well as in Australia